Is a changing workforce altering benefits administration? Yes. The evidence is undeniable—today’s workforce looks markedly different than the workforce of our parents’ generation. Benefit leaders understand this, and are shifting how they select and administer benefits. Here, we forecast what’s coming and explain what that means for benefit administration providers and leaders.
What Does the Future of Benefits Admin Look Like?
The future of benefits administration has already begun—at least in the sense that it’s no longer wise (not that it ever was) to ignore the demands of a changing workforce. Experts predict the next generation of benefits administration will be shaped by the following forces:
• Workers’ increased desire to create customized benefit packages that are better suited to their needs and preferences
• Workers’ demand for greater flexibility when it comes to their ability to change their benefits
• The increased importance of paid leave
• Greater demand for work/life balance
• Demand for benefit plans that meet the needs of workers forgoing full-time employment for contract work
What Does a New Future Mean for Benefits Administration?
How benefits are selected and administered will continue to change. These changes will manifest in at least four ways:
1. Benefits admin will require creative thinking to meet the demands of a changing workforce
Benefits administrators will need to tap into their creativity to find solutions that meet the needs of a changing workforce. Many have already realized this and have thus already started making changes.
According to a November 2017 survey by Willis Towers Watson, 49% of employers have started the process of reconfiguring how benefits are administered, creating benefit plans and options that fit a new workforce.
2. Benefits admin will move toward offering more customized options
Two factors are particularly relevant when discussing benefit customization—increased choice and better fit. Workers eligible for benefits want greater choice and the ability to create personalized benefit packages. And contract, freelance, and gig workers want benefit packages that fit their mode of work.
Customization and Personalization
Full-time workers and those eligible for benefit packages want greater choice and the ability to personalize a benefits package. Adopting a private exchange model lets companies connect workers to greater choices and more flexibility.
For example, Walgreens, who adapted the private exchange model in 2013, offers employees about 50 health and voluntary benefit options through the private exchange platform. Private exchange models, such as the one adopted by Walgreens, provide an appropriate array of choices suitable for diverse workplaces. Plus, they are easy to navigate. According to Walgreens Vice President, it only takes employees about 45 minutes to choose their benefits.
Better Fit
With more employers turning full-time positions into contract positions, benefits administrators will need to focus on providing plans that fit the new “gig” workforce.
According to a Q4 Talent Trends report by Randstad Sourceright, 61% of employers are turning 30% of their positions into contract positions or freelance “gig” positions. As this trend continues, companies like Microsoft, are spearheading shifts in benefits administration by looking at the positions they have, figuring out which can be turned into contract positions, and reconfiguring benefit packages to reflect the needs of full-time and contract workers—needs which are quite different.
If top talent leaves full-time employment for contract work, companies will want benefit packages that attract them back, even if only for a short period of time.
3. Benefits admin will need to approach providing employees with choice cautiously
Providing workers with more options is the future. But, employers should be cautious about overwhelming employees with too much choice. Present the number of options necessary to meet the demand for choice while taking steps to make sure that no superfluous choices are offered.
4. Benefits admin will need to move to an on-demand model
Confining all benefit decisions to open-enrollment periods is becoming too restrictive for the modern employee. For example, those who decide to start a family mid-year often cannot wait until the next open-enrollment period to make changes.
The reality is individual and family health is affected by factors outside of the workers’ control. Employees are growing impatient with companies that force them to deal with these changes until the next open-enrollment period arrives.
Benefits administrators who let workers make changes to their benefit plans at any time of year will attract and retain top talent.
Getting Ready for the Future Starts Now
Change can sometimes be scary and overwhelming. But, it doesn’t have to be. Partner with a benefits provider who understands the future of benefits administration and let them guide you to a brighter future. At Clarity Benefit Solutions, we have several options—from COBRA administration services to revolutionary HSAs and more— for those looking to stay ahead of the curve.
